scholarly journals Securing Financial Independence in the Legal Basis of a Central Bank

2005 ◽  
Author(s):  
Fabian Amtenbrink
Keyword(s):  
Central Bank ◽  
Legal Basis ◽  
Financial Independence

scholarly journals Financial Independence of Central Bank through the Balance Sheet Prism

2014 ◽  
Vol 3 (2) ◽  
pp. 37-59 ◽  
Author(s):  
Valentina Ivanović
Keyword(s):  
Central Bank ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Balance Sheet ◽  
Central Banks ◽  
Central Bank Independence ◽  
Financial Independence ◽  
Balance Sheets ◽  
Financial Strength ◽  
The Global Financial Crisis

Abstract The main reason for central bank independence lies in the fact that it is necessary to clearly distinguish spending money from the ability of making money. Independence of central banks is now a characteristic of almost all developed and highly industrialized countries. In this respect, it represents an essential part of the overall economic reality of these countries. Over the past decade or somewhat earlier, the issue of importance of central bank independence has been raised in developing countries, making the institutional, functional, personal and financial independence of central banks current topics for consideration. The key reason for the growing attention to financial independence of central banks is due to the effects of the global financial crisis on their balance sheets and therefore the challenges related to achieving the basic goals of the functioning of central banks - financial stability and price stability. Financial strength and independence of central banks must be developed relative to the policy and tasks that are carried out and risks they face in carrying out of these tasks. Financial independence represents a key base for credibility of a central bank. On one hand, the degree of credibility is associated with the ability of central banks to carry out their tasks without external financial assistance. In order to enhance the credibility of central bank in this regard, it must have sufficient financial strength to absorb potential losses and that power must be continuously strengthened by increasing capital and rearranging profit allocation arrangements. This is particularly important in times of crisis.

scholarly journals TOWARD A NEW COMPARATIVE PUBLIC LAW OF CENTRAL BANK LEGISLATION: Designing Legislative Mandates for Central Bank Private Securities Assets Purchases and Nominal GDP Targeting

2021 ◽  
Vol 10 (1) ◽  
pp. 5-38
Author(s):  
Bryane Michael ◽  
Svitlana Osaulenko
Keyword(s):  
Central Bank ◽  
Central Banks ◽  
Public Law ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Legal Basis ◽  
Lender Of Last Resort ◽  
Legal Foundations ◽  
Pros And Cons ◽  
Asset Purchases

Abstract What role could unconventional monetary policy – and particularly unconventional policies like private asset purchases under a quantitative easing or lender of last resort scheme – play in influencing economic growth directly? A wide literature in economics explores the pros and cons of using these policies. However, most studies also point to the uncertain and antagonistic legal basis for such purchases. In this paper, we show how the statutory mandate for nominal GDP targeting could best put in place the legal foundations for such asset purchases. We review the legislative and regulatory bases for private securities purchases made by central banks in a sample of countries. We discuss – if legislators and policymakers wanted to – how they might introduce clearer mandates to make such purchases into their public law. We finally show how legal authorizations for GDP targeting might (and probably should) provide for such authorisations. Our discussion sheds light on the fascinating and almost completely ignored area of public law, namely central bank law.

scholarly journals Non-Neutrality of Open-Market Operations

2020 ◽  
Vol 12 (3) ◽  
pp. 175-226 ◽  
Author(s):  
Pierpaolo Benigno ◽  
Salvatore Nisticò
Keyword(s):  
Private Sector ◽  
Central Bank ◽  
Balance Sheet ◽  
Open Market ◽  
Financial Independence ◽  
Wealth Transfer ◽  
Political Constraints

We analyze the effects on inflation and output of unconventional open-market operations due to the possible income losses on the central bank’s balance sheet. We first state a general Neutrality Property, and characterize the theoretical conditions supporting it. We then discuss three non-neutrality cases. First, with no treasury’s support, sizeable (current or expected) balance sheet losses can undermine the central bank’s solvency and should be resolved through an increase in inflation. Second, a central bank might also engineer higher inflation in the case it wants to limit or reduce losses because of political constraints or to seek more financial independence. Third, if the treasury is unable or unwilling to tax households to cover the central bank’s losses, the wealth transfer to the private sector also leads to higher inflation. (JEL E23, E31, E52, E58)

scholarly journals A New Insight into the Measurement of Central Bank Independence

2019 ◽  
Vol 8 (1) ◽  
pp. 67-96 ◽  
Author(s):  
M. Fouad Jasmine ◽  
E. Fayed Mona ◽  
A. Emam Heba Talla
Keyword(s):  
Central Bank ◽  
Central Bank Independence ◽  
Government Accountability ◽  
Lender Of Last Resort ◽  
Financial Independence ◽  
Vulnerability Indicator ◽  
Two Indices ◽  
Monetary Policy Reaction Function ◽  
New Variables ◽  
Almost All

Abstract The present paper attempts to expand the existing literature on Central Bank Independence (CBI) by proposing new measures for CBI. It designs two indices: one tackling the de jure CBI and the other assessing the de facto level of CBI. The two measures outweigh traditional measures in various aspects; first, the two indices are more comprehensive in terms of possible institutional arrangements. The de jure index incorporates several aspects related to CBI that were not previously grouped together in a unified index i.e. financial independence, limitations related to indirect credit to government, accountability and transparency. The de facto index comprises the main existing indicators for measuring actual CBI (i.e. turnover ratio, political vulnerability indicator and monetary policy reaction function) in addition to new variables, as the lender of last resort function, independence of central bank board, and financial independence that were not included in almost all previous studies. Second, the two indices allow a higher level of precision as they comprise aspects that can be objectively codified with a minimum level of subjectivity. Third, the two indices cover the same attributes of CBI to facilitate measuring the deviation between de jure and de facto level of independence for any central bank. The current paper provides a comprehensive definition and analysis of both indices to enable their replication in future studies.

scholarly journals A Central Bank Theory of Price Level Determination

2020 ◽  
Vol 12 (3) ◽  
pp. 258-283
Author(s):  
Pierpaolo Benigno
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Price Level ◽  
Balance Sheet ◽  
Short Term ◽  
Financial Independence ◽  
The Interest Rate

This paper develops a theory in which the central bank can control the price level without fiscal backing. It is shown that the remittances policy and the balance sheet of the central bank are important elements to specify. A central bank that is appropriately capitalized can succeed in controlling prices by setting the interest rate on reserves, holding short-term assets, and rebating its income to the treasury from which it has to maintain financial independence. (JEL E31, E52, E58)

scholarly journals MEDIASI SEBAGAI ALTERNATIF PENYELESAIAN SENGKETA PERBANKAN

2016 ◽  
Vol 1 (1) ◽  
pp. 120
Author(s):  
Nahdhah Nahdhah
Keyword(s):  
Central Bank ◽  
Dispute Resolution ◽  
Alternative Dispute Resolution ◽  
Research Question ◽  
Logical Consequence ◽  
The State ◽  
Legal Basis ◽  
Legal Norms ◽  
Different Sources

The present research aims to understand the position of the banking mediation institution within the regulatory frameworkproduced by the state and by the Central Bank of Indonesia, and to explore the ways in which resolution of conflicts are mediated by the institution.This study approaches the topic using normative-juridical perspective. That is to research legal norms related to this issue by utilizing three different sources: primary, secondary and tertiary legal sources. In turn, relevant data will be proccessed and analyzed so that the research question will be properly answered.    It is a logical consequence of the independency of the Central Bank of Indonesia that the regulation of the Central Bank number 8/5/PBI/2006 on Banking Mediation was replaced by the regulation of the Central Bank number 10/1/PBI/2008. In the new regulation, there is no legal basis for the works of the banking mediation institution, which are highly important. This situasion of ‘legal vacuum’ needs some legal solutions, either by passing a relevant bill or producing a temporary operating regulation. Keywords: Alternative Dispute Resolution, Banking, MediationPenelitian ini bertujuan untuk memahami posisi lembaga mediasi perbankan dalam peraturan frameworkproduced oleh negara dan oleh Bank Indonesia, dan untuk mengeksplorasi cara-cara di mana resolusi konflik dimediasi oleh lembaga.Penelitian ini mendekati topik menggunakan perspektif normatif-yuridis. Itu adalah untuk penelitian norma-norma hukum yang terkait dengan masalah ini dengan memanfaatkan tiga sumber yang berbeda: sumber hukum primer, sekunder dan tersier. Pada gilirannya, data yang relevan akan diproses dan dianalisa sehingga pertanyaan penelitian akan dijawab dengan benar.Ini merupakan konsekuensi logis dari independensi Bank Sentral Indonesia bahwa regulasi jumlah Bank Sentral 05/08 / PBI / 2006 tentang Mediasi Perbankan digantikan oleh regulasi jumlah Bank Sentral 01/10 / PBI / 2008. Dalam peraturan baru, tidak ada dasar hukum bagi karya-karya dari lembaga mediasi perbankan, yang sangat penting. situasion ini 'kekosongan hukum' membutuhkan solusi hukum, baik dengan melewati tagihan yang relevan atau memproduksi peraturan operasi sementara.Kata kunci : Alternatif Penyelesaian Sengketa, Mediasi, Perbankan

scholarly journals THE ESTABLISHMENT OF THE SHARĪᶜAH ADVISORY COUNCIL OF CENTRAL BANK OF MALAYSIA: SPECIAL REFERENCE TO SECTION 51 OF CENTRAL BANK OF MALAYSIA ACT 2009 (ACT 701)

2020 ◽  
Vol 5 (21) ◽  
pp. 257-266
Keyword(s):  
Central Bank ◽  
Qualitative Method ◽  
Legal Aspect ◽  
Organization Structure ◽  
Advisory Council ◽  
Primary Data ◽  
Legal Interpretation ◽  
Legal Basis ◽  
Legal Research ◽  
Statutory Requirement

Sharīᶜah Advisory Council which established under the aegis of the Central Bank of Malaysia (CBM), is designated as the highest authoritative body for the ascertainment of Sharīᶜah ruling in the matters of Islamic financial business. This apex advisory council is currently regulated by the Central Bank of Malaysia Act 2009. Hence the establishment of this council is pursuant to the statutory requirement. This article seeks to analyse the statutory requirement of Section 51 pertaining to the establishment of the Sharīᶜah Advisory Council of Central Bank of Malaysia. This is doctrinal legal research with the qualitative method. The primary data of statutory provisions were scrutinized by using the method of content analysis. The study found that there are several deficiencies of the provision in dealing with the establishment of Sharīᶜah Advisory Council pertaining to the legal interpretation, the legal basis for the establishment of Sharīᶜah Advisory Council, the procedures to be adopted and the position of the Sharīᶜah Advisory Council within Central Bank of Malaysia’s Organization Structure. Finally, the article suggests several amendments be made by respective authorities in order to strengthen the legal aspect of the establishment of Sharīᶜah Advisory Council of Central Bank of Malaysia.

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